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Amazon.com Announces Second Quarter Sales up 22% to $15.70 Billion

SEATTLE--(BUSINESS WIRE)--Jul. 25, 2013-- Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2013.

Operating cash flow increased 41% to $4.53 billion for the trailing twelve months, compared with $3.22 billion for the trailing twelve months ended June 30, 2012. Free cash flow decreased 76% to $265 million for the trailing twelve months, compared with $1.10 billion for the trailing twelve months ended June 30, 2012. Free cash flow for the trailing twelve months ended June 30, 2013 includes fourth quarter 2012 cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

Common shares outstanding plus shares underlying stock-based awards totaled 474 million on June 30, 2013, compared with 468 million one year ago.

Net sales increased 22% to $15.70 billion in the second quarter, compared with $12.83 billion in second quarter 2012. Excluding the $392 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 25% compared with second quarter 2012.

Operating income decreased 26% to $79 million in the second quarter, compared with $107 million in second quarter 2012. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

Net loss was $7 million in the second quarter, or $0.02 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, in second quarter 2012.

“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Jeff Bezos, founder and CEO of Amazon.com. “The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”

Highlights

  • Amazon and Viacom Inc. announced an expanded multi-year, multi-national digital video licensing agreement to bring hundreds of TV shows and thousands of TV episodes from Viacom to Prime Instant Video, including a collection of TV shows that customers won’t find on any other digital video subscription service. Prime members now have unlimited instant streaming access to popular kids’ titles such as Dora the Explorer and SpongeBob SquarePants, along with top-rated shows from MTV and COMEDY CENTRAL.
  • Amazon announced expanded multi-year licensing agreements with NBCUniversal Cable & New Media Distribution and PBS Distribution, bringing popular TV shows to Prime Instant Video such as Grimm, Suits, NOVA, and Masterpiece. Prime Instant Video now includes more than 41,000 movies and TV episodes that are available for Prime members to watch at no additional charge.
  • Comedy pilots Alpha House and Betas, along with kids pilots Annebots, Creative Galaxy and Tumbleaf, have been given the greenlight to begin production on a full series of episodes that will air exclusively on Prime Instant Video later this year and in early 2014.
  • Amazon announced that since launch, Kindle FreeTime Unlimited has already added more than a thousand books, games, educational apps, movies and TV shows, including popular kids’ titles from Disney, Warner Bros. Interactive Entertainment, Electronic Arts and more. Kindle FreeTime Unlimited brings together for the first time all the types of content kids and parents love into one simple, unlimited, easy-to-use service for kids ages 3-8.
  • Amazon announced that the Amazon Appstore is now available to millions of customers in nearly 200 countries, giving them access to apps and games from top brands like Disney and Electronic Arts, new releases including “Angry Birds Friends” and all-time favorites like “Temple Run 2”. Customers around the world can now buy apps and games directly from the Amazon Appstore on Macs, PCs or Android phones and tablets, including Kindle Fire.
  • Amazon announced that customers can now use Amazon Coins to purchase apps, games and in-app items in the Amazon Appstore and on Kindle Fire. For customers, Amazon Coins is an easy way to purchase apps and in-app items on Kindle Fire, and for developers it’s another opportunity to drive traffic, downloads and increased monetization. With discounts of up to 10% for purchasing Coins in bulk, it’s also an opportunity for customers to save money on their app and game purchases.
  • Amazon Publishing announced Kindle Worlds, the new publishing model that allows any writer to publish authorized stories inspired by popular Worlds and make them available for readers to purchase in the Kindle Store, and earn up to a 35% royalty while doing so.
  • Amazon Publishing announced that Oliver Pötzsch has become the first Amazon Publishing author to sell 1 million copies in combined print, audio, and Kindle English language editions worldwide.
  • Amazon announced that Kindle Fire HD and Kindle Fire HD 8.9” are now available to customers in over 170 countries and territories around the world through Amazon.com, giving customers access to millions of apps, games, books, audiobooks and magazines, including more than 350,000 books that are exclusive to the Kindle Store.
  • Amazon introduced Kindle Paperwhite and Kindle Fire HD in China, available both online at amazon.cn and popular retail locations. Customer response to this launch significantly exceeded expectations and product went out of stock in many retail outlets within the first week.
  • Amazon announced that Kindle Fire HD is now available for customers to purchase in Canada at www.amazon.ca and select retailers. In addition, Kindle Paperwhite and Kindle Fire HD are now available for customers to purchase in India at www.amazon.in and select retailers.
  • Amazon announced new accessibility features for the free Kindle for iOS reading app, making it easier than ever for blind and visually impaired customers to navigate their Kindle libraries, read and interact with their books and more. Similar accessibility enhancements will be available on additional platforms in the future.
  • Amazon announced the launch of its marketplace in India, www.amazon.in, providing customers a convenient and trustworthy online shopping experience and Indian retailers of all sizes a robust and scalable platform to sell their products online with no listing fees and pay-as-you-go fulfillment services.
  • Goodreads announced it now has over 20 million members – up from 10 million in less than one year. Goodreads is a leading site for readers and book recommendations that helps people find and share books they love. Goodreads members can discover new books by seeing what their friends are reading or by using the Goodreads Book Recommendation Engine; share ratings and recommendations; track what they have read; and list what they want to read.
  • As part of its Amazon Career Choice Program, Amazon is increasing the amount it will pre-pay for hourly employees to pursue associate degrees or vocational certifications. The program is designed to expand the choices available to its employees in well-paying high demand careers, whether its building a career at Amazon or as a step towards a career in another industry, such as computer and information technology, health and sciences, and accounting. Amazon will pre-pay an eligible employee’s tuition up to $3,000 per year or up to $12,000 over four years.
  • Amazon Web Services (AWS) became the first major cloud provider to achieve FedRAMP Compliance which recognizes the ability of AWS to meet extensive security requirements and compliance mandates for running sensitive US government applications and protecting data. FedRAMP certification simplifies and speeds the ability for government agencies to evaluate and adopt AWS for a wide range of applications and workloads.
  • AWS announced the launch of the AWS Certification Program, which recognizes IT professionals that possess the skills and technical knowledge necessary for building and maintaining applications and services on the AWS Cloud. AWS Certifications help organizations identify candidates and consultants who are proficient at architecting and developing for the cloud.
  • AWS further enhanced its security and identity management capabilities across several services – introducing resource-level permissions for Amazon Elastic Compute Cloud (EC2) and Amazon Relational Database Service (RDS), adding identity federation to AWS Identity and Access Management (IAM), extending Amazon Simple Storage Service (S3) Server Side Encryption support to Amazon Elastic Map Reduce (EMR), and adding custom SSL certificate support for CloudFront. These enhancements give customers more granular security controls over their AWS deployments, applications and sensitive data.
  • AWS announced it had lowered prices by up to 80% on Amazon EC2 Dedicated Instances, instances that run on single-tenant hardware dedicated to a single customer account. In addition, AWS lowered prices on Amazon RDS instances with On-Demand price reductions of up to 28% and Reserved Instance (RI) price reductions of up to 27%.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 25, 2013, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Third Quarter 2013 Guidance

  • Net sales are expected to be between $15.45 billion and $17.15 billion, or to grow between 12% and 24% compared with third quarter 2012.
  • Operating loss is expected to be between $440 million and $65 million, compared to $28 million in third quarter 2012.
  • This guidance includes approximately $340 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, acquisitions, and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, payments, and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

About Amazon.com

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Kindle Paperwhite is the most-advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, extra-long battery life, and a thin and light design. The new latest generation Kindle, the lightest and smallest Kindle, now features new, improved fonts and faster page turns. Kindle Fire HD features a stunning custom high-definition display, exclusive Dolby audio with dual stereo speakers, high-end, laptop-grade Wi-Fi with dual-band support, dual-antennas and MIMO for faster streaming and downloads, enough storage for HD content, and the latest generation processor and graphics engine—and it is available in two display sizes—7” and 8.9”. The large-screen Kindle Fire HD is also available with 4G wireless, and comes with a groundbreaking $49.99 introductory 4G LTE data package. The all-new Kindle Fire features a 20% faster processor, 40% faster performance, twice the memory, and longer battery life.

Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.amazon.com.br and amazon.in. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

 

AMAZON.COM, INC.

Consolidated Statements of Cash Flows
(in millions)
(unaudited)
           
 
 

Three Months Ended

Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
  2013     2012     2013     2012     2013     2012  
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 4,481 $ 2,288 $ 8,084 $ 5,269 $ 2,335 $ 2,047
 
OPERATING ACTIVITIES:
Net income (loss) (7 ) 7 75 137 (101 ) 377

Adjustments to reconcile net income (loss) to net cash from operating activities:

Depreciation of property and equipment, including internal-use software and website development, and other amortization

756 485 1,457 942 2,673 1,579
Stock-based compensation 298 221 526 381 978 684
Other operating expense (income), net 32 32 63 79 139 158
Losses (gains) on sales of marketable securities, net - (2 ) - (4 ) (6 ) (10 )
Other expense (income), net 42 (19 ) 110 (4 ) 367 (58 )
Deferred income taxes 21 (43 ) (58 ) (81 ) (243 ) 20

Excess tax benefits from stock-based compensation

- (85 ) - (125 ) (304 ) (126 )
Changes in operating assets and liabilities:
Inventories (30 ) (124 ) 505 622 (1,116 ) (1,224 )
Accounts receivable, net and other (211 ) (166 ) 518 580 (922 ) (572 )
Accounts payable - 180 (4,187 ) (4,078 ) 1,962 1,453
Accrued expenses and other (77 ) 59 (780 ) (470 ) 728 716
Additions to unearned revenue 516 382 1,200 779 2,217 1,376
Amortization of previously unearned revenue   (460 )   (333 )   (921 )   (602 )   (1,840 )   (1,151 )
Net cash provided by (used in) operating activities 880 594 (1,492 ) (1,844 ) 4,532 3,222
 
INVESTING ACTIVITIES:

Purchases of property and equipment, including internal-use software and website development

(855 ) (657 ) (1,526 ) (1,043 ) (4,267 ) (2,123 )
Acquisitions, net of cash acquired, and other (148 ) (624 ) (251 ) (673 ) (323 ) (770 )
Sales and maturities of marketable securities and other investments 696 1,251 1,296 2,989 2,544 5,864
Purchases of marketable securities and other investments   (1,113 )   (565 )   (1,888 )   (1,417 )   (3,774 )   (4,485 )
Net cash provided by (used in) investing activities (1,420 ) (595 ) (2,369 ) (144 ) (5,820 ) (1,514 )
 
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation - 85 - 125 304 126
Common stock repurchased - - - (960 ) - (1,237 )
Proceeds from long-term debt and other 81 123 107 190 3,274 242

Repayments of long-term debt, capital lease, and finance lease obligations

  (290 )   (141 )   (473 )   (293 )   (748 )   (483 )
Net cash provided by (used in) financing activities (209 ) 67 (366 ) (938 ) 2,830 (1,352 )
 
Foreign-currency effect on cash and cash equivalents   (28 )   (19 )   (153 )   (8 )   (173 )   (68 )
Net increase (decrease) in cash and cash equivalents (777 ) 47 (4,380 ) (2,934 ) 1,369 288
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,704   $ 2,335   $ 3,704   $ 2,335   $ 3,704   $ 2,335  
 
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 39 $ 8 $ 52 $ 14 $ 68 $ 22
Cash paid for income taxes (net of refunds) 34 20 120 39 193 66
Property and equipment acquired under capital leases 447 207 787 356 1,233 699
Property and equipment acquired under build-to-suit leases 244 15 394 31 392 125
 
 
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
       

Three Months Ended

Six Months Ended

June 30,

June 30,

  2013     2012     2013     2012  
 
Net product sales $ 12,752 $ 10,791 $ 26,023 $ 22,040
Net services sales   2,952     2,043     5,751     3,979  
Total net sales 15,704 12,834 31,774 26,019
 
Operating expenses (1):
Cost of sales 11,209 9,488 23,010 19,515
Fulfillment 1,837 1,356 3,633 2,651
Marketing 675 537 1,307 1,017
Technology and content 1,586 1,082 2,969 2,027
General and administrative 286 232 531 432
Other operating expense (income), net   32     32     64     79  

Total operating expenses

  15,625     12,727     31,514     25,721  
 
Income from operations 79 107 260 298
 
Interest income 9 10 19 22
Interest expense (33 ) (21 ) (66 ) (42 )
Other income (expense), net   (38 )   50     (115 )   (49 )
Total non-operating income (expense)   (62 )   39     (162 )   (69 )
 
Income before income taxes 17 146 98 229
 
Benefit (provision) for income taxes (13 ) (109 ) 6 (151 )
Equity-method investment activity, net of tax   (11 )   (30 )   (29 )   59  
Net income (loss) $ (7 ) $ 7   $ 75   $ 137  
 
Basic earnings per share $ (0.02 ) $ 0.02   $ 0.16   $ 0.30  
 
Diluted earnings per share $ (0.02 ) $ 0.01   $ 0.16   $ 0.30  
 
 
Weighted average shares used in computation of earnings per share:
Basic   456     451     455     452  
Diluted   456     458     463     459  
 
(1) Includes stock-based compensation as follows:
Fulfillment $ 81 $ 58 $ 142 $ 94
Marketing 24 16 40 28
Technology and content 155 112 274 198
General and administrative 38 35 70 61
 
 
AMAZON.COM, INC.
Consolidated Statements Of Comprehensive Income (Loss)
(in millions)
(unaudited)
         
Three Months Ended Six Months Ended
June 30, June 30,
  2013     2012     2013     2012  
 
Net income (loss) $ (7 ) $ 7 $ 75 $ 137
 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $(4), $17, $(13), and $(21) 7 (151 ) (71 ) (14 )
Net change in unrealized gains on available-for-sale securities:
Unrealized gains (losses), net of tax of $3, $0, $4, and $(3) (7 ) (1 ) (9 ) 6

Reclassification adjustment for losses (gains) included in "Other income (expense), net," net of tax effect of $0, $0, $0, and $1

  -     (2 )   -     (4 )
Net unrealized gains (losses) on available-for-sale securities   (7 )   (3 )   (9 )   2  
Total other comprehensive income (loss)   -     (154 )   (80 )   (12 )
 
Comprehensive income (loss) $ (7 ) $ (147 ) $ (5 ) $ 125  
 
 
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
 
 
 
Three Months Ended Six Months Ended
June 30, June 30,
  2013     2012     2013     2012  
North America
Net sales $ 9,495 $ 7,326 $ 18,886 $ 14,754
Segment operating expenses (1)   9,086     6,982     18,020     14,061  
Segment operating income $ 409   $ 344   $ 866   $ 693  
 
International
Net sales $ 6,209 $ 5,508 $ 12,888 $ 11,265
Segment operating expenses (1)   6,209     5,492     12,904     11,200  
Segment operating income (loss) $ -   $ 16   $ (16 ) $ 65  
 
Consolidated
Net sales $ 15,704 $ 12,834 $ 31,774 $ 26,019
Segment operating expenses (1)   15,295     12,474     30,924     25,261  
Segment operating income 409 360 850 758
Stock-based compensation (298 ) (221 ) (526 ) (381 )
Other operating income (expense), net   (32 )   (32 )   (64 )   (79 )
Income from operations 79 107 260 298
Total non-operating income (expense) (62 ) 39 (162 ) (69 )
Benefit (provision) for income taxes (13 ) (109 ) 6 (151 )
Equity-method investment activity, net of tax   (11 )   (30 )   (29 )   59  

Net income (loss)

$ (7 ) $ 7   $ 75   $ 137  
 
Segment Highlights:
Y/Y net sales growth:
North America 30 % 36 % 28 % 36 %
International 13 22 14 27
Consolidated 22 29 22 32
Y/Y segment operating income growth (decline):
North America 19 % 61 % 25 % 37 %
International (99 ) (91 ) (125 ) (81 )
Consolidated 14 (7 ) 12 (11 )
Net sales mix:
North America 60 % 57 % 59 % 57 %
International   40     43     41     43  
  100   %   100   %   100   %   100   %
 

(1) Represents operating expenses, excluding stock-based compensation and "Other operating expense (income), net," which are not allocated to segments.

 

 
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
North America
Media $ 2,173 $ 1,874 $ 4,686 $ 4,070
Electronics and other general merchandise 6,478 4,937 12,606 9,710
Other (1) 844 515 1,594 974
Total North America $ 9,495 $ 7,326 $ 18,886 $ 14,754
 
International
Media $ 2,224 $ 2,245 $ 4,769 $ 4,758
Electronics and other general merchandise 3,937 3,224 8,024 6,426
Other (1) 48 39 95 81

Total International

$ 6,209 $ 5,508 $ 12,888 $ 11,265
 
Consolidated
Media $ 4,397 $ 4,119 $ 9,455 $ 8,828
Electronics and other general merchandise 10,415 8,161 20,629 16,136
Other (1) 892 554 1,690 1,055
Total consolidated $ 15,704 $ 12,834 $ 31,774 $ 26,019
 
Y/Y Net Sales Growth:
North America:
Media 16 % 18 % 15 % 17 %
Electronics and other general merchandise 31 41 30 43
Other 64 58 64 62
Total North America 30 36 28 36
 
International:
Media (1) % 8 % - % 15 %
Electronics and other general merchandise 22 34 25 37
Other 22 14 18 19
Total International 13 22 14 27
 
Consolidated:
Media 7 % 13 % 7 % 16 %
Electronics and other general merchandise 28 38 28 41
Other 61 54 60 57
Total consolidated 22 29 22 32
 
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media 7 % 12 % 7 % 17 %
Electronics and other general merchandise 29 42 31 42
Other 27 20 22 23
Total International 20 28 21 30
 
Consolidated:
Media 11 % 15 % 11 % 17 %
Electronics and other general merchandise 30 42 30 42
Other 61 55 61 58
Total consolidated 25 32 25 33
 
Consolidated Net Sales Mix:
Media 28 % 32 % 30 % 34 %
Electronics and other general merchandise 66 64 65 62
Other 6 4 5 4
100 % 100 % 100 % 100 %
 

(1)    Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.

 
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
   
June 30, December 31,
  2013     2012  
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 3,704 $ 8,084
Marketable securities 3,759 3,364
Inventories 5,420 6,031
Accounts receivable, net and other 2,861 3,364
Deferred tax assets   541     453  
Total current assets 16,285 21,296
Property and equipment, net 8,789 7,060
Deferred tax assets 128 123
Goodwill 2,614 2,552
Other assets   1,807     1,524  
Total assets $ 29,623   $ 32,555  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,990 $ 13,318
Accrued expenses and other   5,745     5,684  
Total current liabilities 14,735 19,002
Long-term debt 3,042 3,084
Other long-term liabilities 3,113 2,277
 
Commitments and contingencies
 
Stockholders' equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none - -
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 480 and 478
Outstanding shares — 457 and 454 5 5
Treasury stock, at cost (1,837 ) (1,837 )
Additional paid-in capital 8,893 8,347
Accumulated other comprehensive loss (319 ) (239 )
Retained earnings   1,991     1,916  
Total stockholders' equity   8,733     8,192  
Total liabilities and stockholders' equity $ 29,623   $ 32,555  
 
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
                         
            Y/Y %
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM) $ 3,222 $ 3,368 $ 4,180 $ 4,245 $ 4,532 41 %
Purchases of property and equipment (incl. internal-use software & website development) -- TTM $ 2,123 $ 2,310 $ 3,785 $ 4,068 $ 4,267 101 %
Free cash flow (operating cash flow less purchases of property and equipment) -- TTM $ 1,099 $ 1,058 $ 395 $ 177 $ 265 (76 %)
Free cash flow -- TTM Y/Y growth (decline) (40 %) (31 %) (81 %) (85 %) (76 %) N/A
Invested capital (1) $ 10,250 $ 10,392 $ 11,181 $ 12,019 $ 13,115 28 %
Return on invested capital (2) 11 % 10 % 4 % 1 % 2 % N/A
 
Common shares and stock-based awards outstanding 468 469 470 471 474 1 %
Common shares outstanding 452 453 454 455 457 1 %
Stock-based awards outstanding 16 16 16 16 17 7 %
Stock-based awards outstanding -- % of common shares outstanding 3.6 % 3.6 % 3.5 % 3.4 % 3.8 % N/A
 
Results of Operations
Worldwide (WW) net sales $ 12,834 $ 13,806 $ 21,268 $ 16,070 $ 15,704 22 %
WW net sales -- Y/Y growth, excluding F/X 32 % 30 % 23 % 24 % 25 % N/A
WW net sales -- TTM $ 54,325 $ 57,256 $ 61,093 $ 63,978 $ 66,848 23 %
WW net sales -- TTM Y/Y growth, excluding F/X 35 % 33 % 29 % 27 % 25 % N/A
 
Operating income (loss) $ 107 $ (28 ) $ 405 $ 181 $ 79 (26 %)
Operating income -- Y/Y growth (decline), excluding F/X (34 %) (137 %) 59 % 1 % (9 %) N/A
Operating margin -- % of WW net sales 0.8 % (0.2 %) 1.9 % 1.1 % 0.5 % N/A
Operating income -- TTM $ 637 $ 531 $ 676 $ 665 $ 637 0 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (50 %) (48 %) (15 %) (6 %) 3 % N/A
Operating margin -- TTM % of WW net sales 1.2 % 0.9 % 1.1 % 1.0 % 1.0 % N/A
 
Net income (loss) $ 7 $ (274 ) $ 97 $ 82 $ (7 ) (208 %)
Net income (loss) per diluted share $ 0.01 $ (0.60 ) $ 0.21 $ 0.18 $ (0.02 ) (207 %)
Net income (loss) -- TTM $ 377 $ 40 $ (39 ) $ (87 ) $ (101 ) (127 %)
Net income (loss) per diluted share -- TTM $ 0.82 $ 0.09 $ (0.09 ) $ (0.19 ) $ (0.22 ) (127 %)
 
Segments
North America Segment:
Net sales $ 7,326 $ 7,884 $ 12,175 $ 9,391 $ 9,495 30 %
Net sales -- Y/Y growth, excluding F/X 36 % 33 % 23 % 26 % 30 % N/A
Net sales -- TTM $ 30,587 $ 32,540 $ 34,813 $ 36,777 $ 38,945 27 %
Operating income $ 344 $ 291 $ 608 $ 457 $ 409 19 %
Operating margin -- % of North America net sales 4.7 % 3.7 % 5.0 % 4.9 % 4.3 % N/A
Operating income -- TTM $ 1,120 $ 1,268 $ 1,592 $ 1,700 $ 1,766 58 %
Operating income -- TTM Y/Y growth, excluding F/X 14 % 34 % 71 % 72 % 58 % N/A
Operating margin -- TTM % of North America net sales 3.7 % 3.9 % 4.6 % 4.6 % 4.5 % N/A
 
International Segment:
Net sales $ 5,508 $ 5,922 $ 9,093 $ 6,679 $ 6,209 13 %
Net sales -- Y/Y growth, excluding F/X 28 % 27 % 23 % 21 % 20 % N/A
Net sales -- TTM $ 23,738 $ 24,716 $ 26,280 $ 27,201 $ 27,903 18 %
Net sales -- TTM % of WW net sales 44 % 43 % 43 % 43 % 42 % N/A
Operating income (loss) $ 16 $ (59 ) $ 70 $ (16 ) $ - (99 %)
Operating margin -- % of International net sales 0.3 % (1.0 %) 0.8 % (0.2 %) 0.0 % N/A
Operating income (loss) -- TTM $ 359 $ 183 $ 76 $ 11 $ (6 ) (102 %)
Operating income -- TTM Y/Y growth (decline), excluding F/X (57 %) (68 %) (77 %) (83 %) (82 %) N/A
Operating margin -- TTM % of International net sales 1.5 % 0.7 % 0.3 % 0.0 % 0.0 % N/A
 
Consolidated Segments:
Operating expenses (3) $ 12,474 $ 13,574 $ 20,590 $ 15,629 $ 15,295 23 %
Operating expenses -- TTM (3) $ 52,846 $ 55,805 $ 59,425 $ 62,267 $ 65,087 23 %
Operating income $ 360 $ 232 $ 678 $ 441 $ 409 14 %
Operating margin -- % of Consolidated sales 2.8 % 1.7 % 3.2 % 2.7 % 2.6 % N/A
Operating income -- TTM $ 1,480 $ 1,451 $ 1,668 $ 1,711 $ 1,760 19 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (21 %) (15 %) 7 % 15 % 21 % N/A
Operating margin -- TTM % of Consolidated net sales     2.7 %     2.5 %     2.7 %     2.7 %     2.6 %   N/A  
 
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
                         
Y/Y %
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 1,874 $ 2,215 $ 2,903 $ 2,513 $ 2,173 16 %
Media -- Y/Y growth, excluding F/X 18 % 15 % 13 % 14 % 16 % N/A
Media -- TTM $ 8,559 $ 8,847 $ 9,189 $ 9,506 $ 9,805 15 %
Electronics and other general merchandise $ 4,937 $ 5,061 $ 8,503 $ 6,128 $ 6,478 31 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 41 % 39 % 24 % 28 % 31 % N/A
Electronics and other general merchandise -- TTM $ 20,226 $ 21,652 $ 23,273 $ 24,629 $ 26,169 29 %
Electronics and other general merchandise -- TTM % of North America net sales 66 % 67 % 67 % 67 % 67 % N/A
Other $ 515 $ 608 $ 769 $ 750 $ 844 64 %
Other -- TTM $ 1,802 $ 2,041 $ 2,351 $ 2,642 $ 2,971 65 %
 
Supplemental International Segment Net Sales:
Media $ 2,245 $ 2,385 $ 3,611 $ 2,545 $ 2,224 (1 %)
Media -- Y/Y growth, excluding F/X 12 % 12 % 7 % 7 % 7 % N/A
Media -- TTM $ 10,431 $ 10,590 $ 10,753 $ 10,785 $ 10,764 3 %
Electronics and other general merchandise $ 3,224 $ 3,497 $ 5,431 $ 4,086 $ 3,937 22 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 42 % 39 % 37 % 32 % 29 % N/A
Electronics and other general merchandise -- TTM $ 13,139 $ 13,956 $ 15,355 $ 16,238 $ 16,952 29 %
Electronics and other general merchandise -- TTM % of International net sales 55 % 56 % 58 % 60 % 61 % N/A
Other $ 39 $ 40 $ 51 $ 48 $ 48 22 %
Other -- TTM $ 168 $ 170 $ 172 $ 178 $ 187 11 %
 
Supplemental Worldwide Net Sales:
Media $ 4,119 $ 4,600 $ 6,514 $ 5,058 $ 4,397 7 %
Media -- Y/Y growth, excluding F/X 15 % 14 % 10 % 10 % 11 % N/A
Media -- TTM $ 18,990 $ 19,437 $ 19,942 $ 20,291 $ 20,569 8 %
Electronics and other general merchandise $ 8,161 $ 8,558 $ 13,934 $ 10,214 $ 10,415 28 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 42 % 39 % 29 % 30 % 30 % N/A
Electronics and other general merchandise -- TTM $ 33,365 $ 35,608 $ 38,628 $ 40,867 $ 43,121 29 %
Electronics and other general merchandise -- TTM % of WW net sales 61 % 62 % 63 % 64 % 65 % N/A
Other $ 554 $ 648 $ 820 $ 798 $ 892 61 %
Other -- TTM $ 1,970 $ 2,211 $ 2,523 $ 2,820 $ 3,158 60 %
 
Balance Sheet
Cash and marketable securities $ 4,970 $ 5,248 $ 11,448 $ 7,895 $ 7,463 50 %
Inventory, net -- ending $ 4,380 $ 5,065 $ 6,031 $ 5,395 $ 5,420 24 %
Inventory turnover, average -- TTM 10.1 9.7 9.3 9.5 9.4 (7 %)
Property and equipment, net $ 5,097 $ 5,662 $ 7,060 $ 7,674 $ 8,789 72 %
 
Accounts payable -- ending $ 7,072 $ 8,369 $ 13,318 $ 8,916 $ 8,990 27 %
Accounts payable days -- ending 68 75 76 68 73 8 %
 
Other
WW shipping revenue $ 469 $ 517 $ 832 $ 633 $ 646 38 %
WW shipping costs $ 1,054 $ 1,153 $ 1,798 $ 1,396 $ 1,364 29 %
WW net shipping costs $ 585 $ 636 $ 966 $ 763 $ 718 23 %
WW net shipping costs -- % of WW net sales 4.6 % 4.6 % 4.5 % 4.7 % 4.6 % N/A
 
 
Employees (full-time and part-time; excludes contractors & temporary personnel)     69,100       81,400       88,400       91,300       97,000     40 %
 
 
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.

(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

 

Amazon.com, Inc.

Certain Definitions

Customer Accounts

  • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

  • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

  • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

Units

Source: Amazon.com, Inc.

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